Kanen Makes a Big Bet on Housing. Should You Follow?
Key Points
Kanen initiated a position with 250,000 share for an estimated trade size of $8.83 million (estimate based on average quarterly price).
The transaction resulted in the Trex position representing 2.68% of 13F reportable assets under management.
The new stake places Trex outside the fund's top five holdings by value.
What happened
Kanen Wealth Management LLC reported a new stake in Trex (NYSE:TREX) in its Feb. 18, 2026, SEC filing. The fund purchased 250,000 shares, with an estimated transaction value of $8.83 million based on the quarter’s average share price. This was a new addition to the fund.
What else to know
This is a new position, representing 2.68% of Kanen’s reportable U.S. equity assets under management after the trade.
Top five holdings post-filing:
- NYSE:COMP: $67.59 million (20.9% of AUM)
- NASDAQ:ALLT: $45.04 million (13.9% of AUM)
- NYSE:BNED: $30.81 million (9.5% of AUM)
- NASDAQ:REAL: $29.34 million (9.1% of AUM)
- NASDAQ:INSE: $24.84 million (7.7% of AUM)
As of Feb. 18, 2026, shares were priced at $41.89, down 37.3% over the past year, trailing the S&P 500 by 49.6 percentage points.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close February 18, 2026) | $41.89 |
| Market capitalization | $4.49 billion |
| Revenue (TTM) | $1.18 billion |
| Net income (TTM) | $197.88 million |
Company snapshot
- Trex offers composite decking, railing, fencing, and outdoor living products, with brands including Trex Transcend, Trex Select, and Trex Enhance.
- The company generates revenue through manufacturing and distributing outdoor building materials, supplemented by licensing agreements for branded accessories and products.
- It serves residential and commercial markets, distributing through wholesale distributors, retail lumber dealers, and major home improvement retailers such as Home Depot and Lowe's.
Trex is a leading manufacturer of composite decking and outdoor living products, operating at scale with over $1.18 billion in trailing twelve months revenue. The company leverages a vertically integrated model and extensive distribution network to maintain a strong presence in both residential and commercial construction markets. Its focus on branded, low-maintenance alternatives to wood provides a competitive edge in the growing outdoor living segment.
What this transaction means for investors
Investors have been waiting for a turnaround in the housing sector. Kanen Wealth Management may think that this year will mark the beginning. The current environment of low inventory, high prices, and low sales momentum is bound to change. Though it’s a slow process.
The direction for interest rates is lower, and mortgage rates should eventually follow. Increased supply will also have to be a factor. That will benefit Trex.
Trex continues to innovate, with 25% of its sales over the last year coming from new products. The company has also been increasing spending on research and development (R&D) and promoting its leading brand to support further growth.
Even with a subdued housing market, the company’s initiatives have sustained growth. Third-quarter sales jumped 22% year over year. That leaves the company well positioned for a housing boom. Kanen may have initiated a position for that reason. For investors, there are other ways to play a housing recovery, too, including big box retailers.
Trex is a more direct way to benefit, however. Trex will next update investors with its fourth-quarter and full-year financial report on Feb. 24. Interested investors should look for signs of sector momentum from management to see if the timing is right.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Trex. The Motley Fool has a disclosure policy.